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HomeCrypto NewsMarketXRP Users to Earn Directly on XRPL as Ripple Looks to Launch Native Lending Protocol

XRP Users to Earn Directly on XRPL as Ripple Looks to Launch Native Lending Protocol

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More avenues for XRP holders to earn on the XRP Ledger (XRPL) are emerging as Ripple recently proposed a native Lending Protocol.

On Friday, Aanchal Malhotra, the Head of Research at RippleX, and Ripple’s software engineer Vytautas Vito Tumas jointly proposed an XRPL-native lending protocol under the “XLS – 66d” specification.

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This announcement comes four weeks after The Crypto Basic first disclosed that efforts are underway to introduce an XRPL native lending protocol.

Notably, the unveiled proposal seeks to expand the XRPL’s DeFi capabilities, offering users more earning opportunities. It will enable peer-to-peer borrowing and lending of crypto assets without intermediaries. 

Moreover, this protocol will offer fixed-term loans with pooled funds and pre-set interest rates. While bypassing the need for collateral, it relies on off-chain underwriting and risk management. 

Notably, liquidity providers deposit XRP or other tokens into a lending pool to earn interest, while borrowers negotiate loan terms with a pool delegate who manages the lending pool. The protocol supports multiple-lender-single-borrower lending pools for fixed-term loans.

Specifications of the XRPL Lending Protocol

RippleX developers emphasize flexibility and reusability in the design of this proposed XRPL native Lending Protocol. First, they pointed out that flexibility is ensured by designing the protocol to be upgradeable. Also, reusability is attainable by introducing usable objects across multiple future protocols.

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The RippleX developers introduced three specifications for the proposed lending protocol to cater to these features: XLS-64d, XLS-65d, and XLS-66d

Firstly, the XLS-64d specification enables the association of a single pseudo-account with multiple ledger entries, allowing for tracking balances and issuing tokens.

The XLS-65d specification, or “Single Asset Tokenized Pool,” introduces a new Pool ledger entry representing a single tokenized asset pool. This facilitates interaction with minimal, extendable ledger entries and flexible transactions.

Meanwhile, the XLS-66d introduces the actual lending protocol. It leverages XLS-65d for managing liquidity provider assets. 

Ripple CTO Reacts

David Schwartz, Ripple’s CTO, has voiced enthusiasm for the proposed XRP Ledger Native Lending Protocol. He highlighted its capacity to bring fresh utility to the XRPL, suggesting that its adoption could notably elevate the ecosystem. 

Notably, this proposal comes hot on the heels of XRPL implementing an automated market maker (AMM) functionality that allows XRP holders to provide liquidity and earn passively.

Following an amendment two days ago, enthusiasts committed over 820K XRP tokens to liquidity pools. However, the latest figures indicate that over 1.8 million XRP are now locked in liquidity pools.

DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

Author

Abdulkarim Abdulwahab
Abdulkarim Abdulwahabhttp://thecryptobasic.com
Abdulkarim Abdulwahab is a seasoned crypto journalist who has established himself as a trusted voice in the world of blockchain and Web3. His extensive knowledge of the crypto space enables him to break down complex concepts into accessible language.

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